Macy’s on Thursday reported fiscal first-quarter profits and sales ahead of analysts’ expectations, as shoppers returned to malls to shop for new outfits, luggage and luxury goods in spite of decades-high inflation that has threatened to curtail consumption.

The department store chain, which also owns Bloomingdale’s, reaffirmed its fiscal 2022 sales outlook and raised its profit guidance, expecting stronger credit card revenue for the remainder of the year.

Macy’s shares rallied to close Thursday up 19%, at $22.92.

The retailer still expects 2022 revenue to be flat to up 1% compared with 2021 levels, which would be a range of $24.46 billion to $24.7 billion.

It now projects earnings, on an adjusted basis, between $4.53 and $4.95 per share, up from a prior range of $4.13 to $4.52 per share.

“While macroeconomic pressures on consumer spending increased during the quarter, our customers continued to shop,” Chief Executive Officer Jeff Gennette said in a press release. He added that the company saw a shift among consumers back into stores and toward clothing for special occasions such as women’s dresses and tailored men’s items.

Digital sales climbed 2%, representing 33% of net sales for the quarter. The retailer said it had 44.4 million active customers, up 14% from the prior year, aided by Macy’s loyalty program, which helped draw more people online and into stores.

Macy’s reported inventory levels as of April 30 that were up 17% from the prior year and down 10% compared with 2019 levels.
However, Gennette said there is still significant uncertainty around the retailer’s supply chain amid continued pandemic lockdowns in China and ongoing labor negotiations at the port in Los Angeles.

“Factors like these drive us to continue taking a prudent and disciplined approach with our lead times and forecasting,” he said.